Lavrov said the problem requires a joint solution, rather than unilateral steps such as missile tests, threats and new bases. He also said Moscow is looking ahead to new talks with Iran, scheduled for later this month.

"We advocate the continuation and buildup of diplomatic efforts to reach an agreement on Iran's nuclear dossier. We expect that discussions on the proposals made to Iran last month will help create appropriate conditions for that."

The US Treasury is running out of time before foreign patience snaps, writes Ambrose Evans-Pritchard

Merrill Lynch has warned that the United States could face a foreign "financing crisis" within months as the full consequences of the Fannie Mae and Freddie Mac mortgage debacle spread through the world.

Draining away: The US may struggle to plug its capital gap
The country depends on Asian, Russian and Middle Eastern investors to fund much of its $700bn (£350bn) current account deficit, leaving it far more vulnerable to a collapse of confidence than Japan in the early 1990s after the Nikkei bubble burst. Britain and other Anglo-Saxon deficit states could face a similar retreat by foreign investors.

"Japan was able to cut its interest rates to zero," said Alex Patelis, Merrill's head of international economics.

"It would be very difficult for the US to do this. Foreigners will not be willing to supply the capital. Nobody knows where the limit lies."

Brian Bethune, chief financial economist at Global Insight, said the US Treasury had two or three days to put real money behind its rescue plan for Fannie and Freddie or face a dangerous crisis that could spiral out of control.

LONDON (Reuters) - The United States will announce in the next month that it plans to establish a diplomatic presence in Tehran for the first time in 30 years, a British newspaper said on Thursday.

In a front-page report, the Guardian said Washington would open a U.S. interests section in the Iranian capital, halfway towards opening an embassy.

The unsourced report by the newspaper's Washington correspondent said: "The Guardian has learned that an announcement will be made in the next month to establish a U.S. interests section in Tehran, a halfway house to setting up a full embassy.

Hiroshi Watanabe, Japan's chief regulator, rattled the markets yesterday when he urged Japanese banks and life insurance companies to treat US agency debt with caution. The two sets of institutions hold an estimated $56bn of these bonds. Mitsubishi UFJ holds $3bn. Nippon Life has $2.5bn.

But the lion's share is held by the central banks of China, Russia and petro-powers. These countries could all too easily precipitate a run on the dollar in the current climate and bring the United States to its knees, should they decide that it is in their strategic interest to do so.

This, alone, is why the "War on Terror" will not expand beyond Afghanistan and Iraq. Isn't it ironic, of course, that the "lion's share" of our national debt was created by the overzealous spending habits of Presidents Reagan and both Bushes--three "conservative" Republicans? And for a party that likes to wrap itself around the flag and argue that it is the protector of "national security," its tax cut and excessive spending habits have put us in this mess.

It is true; the neoconservative dream of worldwide democracy is over, for at least a generation or two, and we have no choice but to tolerate regimes with abysmal human rights and democracy records, because we have no choice, due to our oil addiction.

But let us also remember that, for all of this, it is not in the best interest of any of these less-than-savory nations to let the U.S. fall, because most of their prosperity from oil and other commodities riches have come from U.S. spending. If we abruptly stopped spending, then their continued prosperity would halt too.

That's where the conciliatory gestures come into play. That means that the U.S. has to keep its ambitions in the diplomatic, rather than military arena, and the rest of the world has to be a bit patient as our monolithic bureaucracy does a slow, but steady U-turn back to stability.

If the U.S. has any sense about it, it will go primarily nuclear, with a sizable minority stake in wind and solar power, and go to an entirely hydrogen economy. Once these "petro-powers" stand to lose their largest customer, then we'll see who has the upper hand in global affairs again.

This, alone, is why the "War on Terror" will not expand beyond Afghanistan and Iraq. Isn't it ironic, of course, that the "lion's share" of our national debt was created by the overzealous spending habits of Presidents Reagan and both Bushes--three "conservative" Republicans? And for a party that likes to wrap itself around the flag and argue that it is the protector of "national security," its tax cut and excessive spending habits have put us in this mess.

In the same week that the US banking system totters near to collapse, the neocons cave in to Russian/Chinese pressure for a peaceful solution in Iran.

Soflee soflee catchee neo-con monkee.

Lest the above is misinterpreted.

I take no pleasure whatever in the sorry financial state in which the US finds itself. I'd be a bit of a fool if I did, as when we look at issues of interdependence and the like, countries like Ireland, Britain, and much of Western Europe are even more 'dependent' on the US for custom than the countries Melon mentioned (and we don't even have the bargaining chip of large scale resources).

But if my analysis regarding the death-knell for neo-con imperialism is correct then, yep, I welcome that, and make no apology for so doing.

A bunch of baloney. If you think these guys are giving up now your out of your mind. An air attack by Isreal (with the backroom backing of these neo-cons) will more than likely occur after the U.S. election in November (quite possibly depending on who wins - i.e. if Obama is elected the attack will happen sooner than later ). I'd love to be as opitimistic as most of you but too much has occured in the last 8 years ( the "stolen" election of 2000, 911, The Invasion of Afghanistan, The Invasion of Iraq) that these guys simply cannot turn back at this point. They WILL "go out" like they "came in" - DRAMATICALLY!!!

A bunch of baloney. If you think these guys are giving up now your out of your mind. An air attack by Isreal (with the backroom backing of these neo-cons) will more than likely occur after the U.S. election in November (quite possibly depending on who wins - i.e. if Obama is elected the attack will happen sooner than later ). I'd love to be as opitimistic as most of you but too much has occured in the last 8 years ( the "stolen" election of 2000, 911, The Invasion of Afghanistan, The Invasion of Iraq) that these guys simply cannot turn back at this point. They WILL "go out" like they "came in" - DRAMATICALLY!!!

This, alone, is why the "War on Terror" will not expand beyond Afghanistan and Iraq. Isn't it ironic, of course, that the "lion's share" of our national debt was created by the overzealous spending habits of Presidents Reagan and both Bushes--three "conservative" Republicans? And for a party that likes to wrap itself around the flag and argue that it is the protector of "national security," its tax cut and excessive spending habits have put us in this mess.

It is true; the neoconservative dream of worldwide democracy is over, for at least a generation or two, and we have no choice but to tolerate regimes with abysmal human rights and democracy records, because we have no choice, due to our oil addiction.

But let us also remember that, for all of this, it is not in the best interest of any of these less-than-savory nations to let the U.S. fall, because most of their prosperity from oil and other commodities riches have come from U.S. spending. If we abruptly stopped spending, then their continued prosperity would halt too.

That's where the conciliatory gestures come into play. That means that the U.S. has to keep its ambitions in the diplomatic, rather than military arena, and the rest of the world has to be a bit patient as our monolithic bureaucracy does a slow, but steady U-turn back to stability.

If the U.S. has any sense about it, it will go primarily nuclear, with a sizable minority stake in wind and solar power, and go to an entirely hydrogen economy. Once these "petro-powers" stand to lose their largest customer, then we'll see who has the upper hand in global affairs again.

GENEVA — International talks on Iran’s nuclear ambitions ended in deadlock on Saturday, despite the Bush administration’s decision to reverse policy and send a senior American official to the table for the first time.

The presence of William J. Burns, the under secretary of state for political affairs, was one of the most important encounters between Iran and the United States since relations were severed nearly three decades ago. And it was part of a rare show of unity among the six negotiating partners—the United States, France, Britain, Germany, Russia and China—who pressed Iran to accept compromise. But Iran responded with a written document that failed to address the main issue: international demands that it stop enriching uranium. And Iranian diplomats reiterated before the talks that they considered the issue nonnegotiable.

...But for some, it is hard to understand why the Americans have made a diplomatic gesture with Mr. Burns’s participation at this time. America’s negotiating partners, particularly Britain, had wanted an American presence when they traveled to Tehran last month to present an enhanced package of incentives. That moment, officials said, would have been meaningful and more logical. Instead, Mr. Burns came to the table when the Iranians were giving their reply, and there had never been a strong signal that it was going to be different from the past. Despite the shift in American willingness to talk, one point of policy clearly has not changed: the Bush administration wants to avoid the impression that it is negotiating with Iran before it suspends its production of enriched uranium, which can be used to make electricity or fuel bombs.

...Complicating the diplomacy was the fact that before Saturday’s talks, the six powers were not united on a joint strategy on how to proceed. The American delegation had told its partners that Mr. Burns’s appearance was a one-time event and that Iran had two weeks to decide whether to accept the “freeze-for-freeze” formula. Germany, Russia and China, by contrast, argued that there should be time to explore the negotiating track with Iran. There were other disagreements among the six powers as well. France and Britain have argued that there should be a precise definition of what the Iranians would have to freeze to open the way to formal talks.